FRESH, REFRIGERATED SOUPS WARMING VOLUME: RETAILERS

MINA WILLIAMS

SAN FRANCISCO (FNS) -- Retailers are discovering that fresh, refrigerated soups provide complementary excitement to meal-solution centers, and boost sales when merchandised along with sandwiches, salads and pastas in other departments.

"[Soup] is a fun, unusual product," said Dave Bennet, owner of Mollie Stone's, a five-unit natural-food chain located in the Bay Area. "We pride ourselves on offering variety and fresh items and we love new products and categories."

But first, operators concede they must redirect shoppers away from the dry grocery aisles where soup has traditionally been found, and into the dairy or refrigerated produce sections, where today's new product lines are merchandised.

"It's a challenge to open a new category," said Bennet. "You have to demo it and educate the customer."

The first challenge is getting customers to recognize -- and accept -- the fresh soup packaging. Some are sold in milk-like cartons, while others are sold in aseptic pouches, a container that has customers thinking it is more of a pasta sauce than soup. Retailers are overcoming the confusion by aggressively sampling the items.

"We introduced the category with demos," said Bennet. "People thought it was milk. It was hard to tell what it was. Customers are used to soup in a can or a box."

At Mollie Stone's, the fresh refrigerated soup is merchandised alongside refrigerated pasta in a 3-foot dairy section. "We felt that customers who would want to trade themselves up from packaged pasta would be the same as those who wanted to trade up to a fresh soup," noted Bennet.

Support from the vendor was key to maintaining shelf space at Mollie Stone's units. "Our vendor worked it and worked it, set up a good delivery system for direct-store delivery and made sure we didn't sit on out-of-date or out-of-code product. We have never had a negative comment from our customers."

Items are packaged in 18- to 20-ounce, milk-like cartons that can be heated in the microwave. Retail ranges from $2.99 to $3.49 for each carton. The soup can stay fresh up to 45 days from production.

Whole Foods Market Inc., Austin, Texas, is another operator who has introduced a refrigerated fresh soup category. As at Mollie Stone's, the offerings are merchandised in the refrigerated section in the dairy department in a 2- to 3-foot area. The soup is merchandised next to other fresh products, such as pizza and hummus, to create a section of fresh, prepared foods.

"More and more customers are looking for new things," said Danny Hancock, the chain's dairy buyer. "They want a fresher taste, they don't want frozen products, so we try to bring in more things like [these soups]."

Soup's entry into the dairy department may boost overall category profits simply because of location. The new products can sell on lower margins, whereas fresh soup in the deli -- the nearest comparable item -- is tagged with the higher labor costs associated with a full-service department, according to the retailers interviewed by SN.

"The deli has prepacked soups in their refrigerated case and then there is soup on the deli's salad bar, but we don't play off each other," said Hancock. "[Dairy] operates on a lower margin, because of labor.

"The direct-store delivery system our vendor uses works well. They leave back stock and our store staff reworks the case daily. And with guaranteed sales we knew we couldn't go wrong with the category," he added.

The San Francisco Whole Food Markets unit here goes through 10 to 20 cases per week, according to Hancock, who also said that the success of the category depends on demos to ensure sales.

Flavors go beyond the traditional favorites to meet the typical consumer who customarily buys premium foods. Wild mushroom, black bean with green chile, carrot and ginger, tomato, basil and garlic are just a few flavors retailers are offering.

Seasonal variations are also part of the mix -- gazpacho in the summer, mushroom and squash flavors in the fall -- to keep customer attention, retailers said.

Salem, Ore.-based Roth's IGA has introduced refrigerated soup into its stores' mix with a slightly different twist. This operator has made the produce department the merchandising destination for the new category. The 13-unit chain positions refrigerated soup adjacent to the prepackaged salads.

"They go together, soup and salad," said Richard Zielinski, deli buyer. "Once we got out of our comfort zone it worked well."

Starting from zero sales, Roth's IGA increased shelf space and stockkeeping units within 30 days. Peg bars were positioned in the middle of the prepackaged salad section to create 4 feet of space for the soups. The packaging of the line introduced at Roth's IGA features a window allowing consumers a slight glimpse of the product. Zielinski said that this feature helped eliminate customer confusion about what the product is so that product sampling was not necessary.

The same vendor's products were available at a Seattle-area Quality Food Centers unit visited by SN in late summer. The Mercer Island QFC merchandised the refrigerated soup in 4 feet of a multideck self-service case across the aisle from the deli. Within the section were other foods-to-go, including prepackaged salads, sandwiches, ready-to-heat ribs and refrigerated fresh pastas.